1. Field of the Invention
The present invention relates to obtaining cost information. In particular, the present invention relates to a method and apparatus for determining the cost of products in a manufacturing facility, thereby improving efficiency and profitability in manufacturing products.
2. Description of the Related Art
Manufacturing facilities are extremely complex and must accommodate: 1) a number of process steps; 2) a wide variety of products; and 3) a wide range of units per customer order. For example, a manufacturing facility which produces lead frames for semiconductor devices may have to produce 750 distinct types of lead frames. A lead frame may have from 8 leads to 208 leads. Some lead frame types may require relatively simple manufacturing steps, where other lead frames may require many complex process steps. Order quantities from customers can range from 10,000 units per order up to 1,000,000 units per order.
Based on a customer order, workorders are generated listing what type of, and how many, products must be manufactured to fill a customer order. A workorder will include a lot number identifying a quantity of material which will be processed into manufactured products. In the lead frame manufacture example, a lot is a reel of metal which will be processed to produce multiple lead frames. Generally, a shop packet or paper printout listing the workorder and other information accompanies lots or reels during the manufacturing process.
A manufacturing facility generally includes a large number of production lines producing an array of distinct products. Each production line may include a number of process steps in manufacturing the final product. In the lead frame manufacturer example, process steps may include a dry etching step and a plating step, among a number of other process steps, in producing the lead frame product supplied to a customer. In each process step, there may be a time period wherein the units are being processed by a machine or undergoing a production run. When the units are not undergoing a production run, the units may be waiting or queued for another process step.
Each process step may have groups of workers organized in teams to complete a particular process step. There may also be multiple shifts or different time periods during a given day where a different group of workers are assigned to a production line for a particular process step.
In most modern manufacturing facilities, a type of system known as Manufacturing Resource Planning ("MRP") is used to keep track of work orders flowing through the production process. For example, an MRP system known as CHESS, supplied by McDonnell Douglas Information Systems, located at Long Beach, Calif., attempts to optimize the manufacturing process by intertwining various software modules. Typically, one module of an MRP system is the costing module.
From costing studies using a typical number of units produced under typical factory conditions, a "standard cost" is determined for each product. This standard cost comprises two component costs: 1) raw material costs per unit; and 2) overhead allocation cost per unit. The standard cost is input into a costing module database accessible by the MRP system. As products flow through the production process, these standard costs are attributable to specific customer orders to determine whether the total cost of these units to the customer was less than, or greater than, the price charged to the customer.
However, these MRP software packages do not accurately provide real-time detail information regarding the manufacturing process. In particular, these MRP software packages do not provide detailed information regarding specific process steps or obtain data on the actual production experience of each and every work order as it flows through the factory. MRP systems do not obtain cost information in real-time or as products are being manufactured at specific process steps. MRP systems rely upon standard costs in a database which may not accurately reflect the current number of units produced or current factory conditions. In order to obtain accurate cost information in MRP systems, additional cost studies requiring substantial amounts of clerical and administration costs is required. Because adequate information from specific process steps is not obtained, accurate information identifying how the manufacture of a specific product can be improved by improving particular process steps and their interaction is not possible. For example, during a particular process step or cycle, it is not known what amount of time is used in setting up the process or machine, rather than actually running the process. Further, there is not adequate information as to how much and how long inventory has been waiting before undergoing a production run in a particular process step. Likewise, during the process step itself, there may not be accurate information as to the production run machine speed and whether process innovations or improved machines may enable a more efficiently manufactured final product. Further, there is no adequate information in regard to the inventory of completed process step units awaiting a next process step. There is no adequate information regarding when a process should be completed in order to coincide with a next process step processing capability.
Similarly, adequate information regarding the efficiency or yield of a particular process step is not available. For example, adequate information regarding the amount of scrap or unusable completed process step units which should be allocated to a particular process step is not taken into account. Scrap units created in one process step may not be identified until a few process steps later. Thus, certain process steps may appear to be efficient while their scrap units are not accurately being identified.
Further, typical costing methods called standard costing or "activity-based costing" only determine the amount of time a typical unit of product spends at each manufacturing step and multiplies this time by a time charge for equipment and labor associated with each manufacturing step. The total cost to manufacture the product is then determined by adding together the costs of each manufacturing step. However, these methods do not determine which process step in the series of production steps is the bottleneck for a specific product type and work order quantity.
Also, value creation information in a process step must be identified. A process step should be able to compare with previous production runs how efficient units are processed with respect to yield, flow efficiency and labor efficiency.
Therefore, it is desirable to provide a method and apparatus which provides information concerning cost, efficiency, bottlenecks, scrap and value creation in particular process steps in manufacturing a product. Further, it is desirable to obtain not only cost, efficiency, bottleneck, scrap and value creation regarding a specific process step in manufacturing a product, but to obtain this information in all products in a manufacturing facility with a wide range of customer order quantities. This information should be obtained continuously in real-time using actual production information without requiring a priori costing studies.